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One Small Antitrust Case, One Giant Step for the Future of Independent Doctors
On the other side of the country, in the unassuming state of Idaho, a health-care antitrust case is being decided. Its outcome will have a ripple affect across America.
The pending verdict has captured the nation’s attention because the U.S. Court of Appeals’ imminent decision may deem unlawful a situation that is common in many American cities -- specifically the merging of hospitals and certain medical groups.
The case involves St. Luke’s Health System and its acquisition of Saltzer Medical Group. The Nampa County practice was Idaho’s largest independent medical group before it sold out to the hospital system in winter of 2013, for just under $30 million, according to court documents.
Like many hospitals that acquire medical practices, St Luke’s claimed that the merger would be better for the patient community as it would help “integrate care” and “enhance efficiencies.”
However, St. Alphonsus Medical Center down the street disagreed and argued that St. Luke’s acquisition created a monopoly that reduced competition, sent costs sky-rocketing and limited patient access and choice. Indeed, the purchase gave St. Luke's 80 percent of the primary care doctors in Nampa and significant bargaining leverage over health insurers, according the Idaho Statesman.
The Federal Trade Commission joined St. Alphonsus and filed suit against St. Luke’s claiming that the merger violated antitrust laws. Last fall, the U.S. District Court for Idaho agreed and ordered the parties to unwind the merger.
St. Luke’s refused, and appealed the decision.
Orlando Group Steps In
That’s when a small but fast-growing national association of independent doctors with roots in Central Florida got involved. Orlando has felt firsthand the negative impacts these mergers have on costs, care and communities. The region has two of the nation’s largest health systems, which are rapidly buying up medical groups to secure market share.
A major national insurance company, which supports the preservation of independence of doctors, reached out to the Association of Independent Doctors for help.
With members in nine states, A.I.D. is the only trade association representing the interests of independent doctors on the national stage.
“The resources from our growing membership allowed us to hire attorneys from a top Washington law firm to write the amicus brief affirming the district court’s decision,” said , A.I.D. founder Tommy Thomas, a certified public accountant in Winter Park.
Thus, A.I.D. filed an amicus brief (a friend of the court opinion) in August asking the higher court to uphold the lower court’s decision. The legal brief eloquently argues and clarifies the reasons Americans need independent doctors, and why hospital-doctor consolidations are bad for patients, communities and the nation’s health-care system.
“This is a giant step forward in the fight for independent doctors,” said Thomas.
In addition to A.I.D., the following groups also filed compelling briefs supporting the lower court’s decision: attorneys general from 16 states, a group of economics professors, America’s Health Insurance Plans, and Catalyst for Payment Reform.
Idaho Attorney General Lawrence Wasden thanked A.I.D. for its involvement, saying he believed the organization’s brief would have a “persuasive impact” on the appeals court, which as of press time was still deliberating.
If the U.S. Court of Appeals for the Ninth Circuit agrees with the lower court and orders the acquisition to be unwound, St. Luke’s won’t be the only hospital affected. Health systems across the nation will be on notice: Buying up market share to the point of creating a monopoly in the community not only increases health-care costs and is bad for patients, but it is also against the law.
“People who work in health-care antitrust law think the ruling could spur more lawsuits from the FTC as it seeks to unwind similar hospital-doctor mergers,” The Idaho Statesman reported.
We’ll soon find out.
Marni Jameson, AID executive director/407-865-4110 or email@example.com
To Join or Not to Join? That Is the Question When Associations Come Calling
What’s in it for me?
Admit it. The question crosses your mind when you’re asked to support a cause. It’s human nature, especially this time of year, when every organization has a hand out for a donation or dues. It’s natural to pull back and ask why should I contribute. What’s in it for me besides a tax deduction?
I can’t speak for other causes, but, as the executive director of the Association of Independent Doctors, a national nonprofit that supports the interests of independent physicians, I have given the “Why join?” question a lot of thought.
Sure, we have lofty goals aimed to benefit all Americans. Many of our members – who now span eight states – joined to support those goals, which include working hard at the national and state levels to reverse the trend of medical practices being acquired by hospitals. We are also working to increase parity and transparency in health-care costs, and are educating consumers about how this affects them and the role they play.
“Well that’s fine,” you say to yourself, “but the association will do that whether I join or not.” I hear you.
I am not tone deaf to the fact that not everyone likes to give money to a cause strictly for the greater good -- great though that good may be. That awareness brings me to the three more reasons your membership can benefit you specifically.
An A.I.D. membership can save you money. As more smart business owners realize that when physicians go to work for hospitals, their businesses lose customers, they are stepping up to help independent doctors stay independent. The following businesses have all joined A.I.D., and are offering members substantial discounts in these areas.
1. Malpractice insurance. MagMutual, one of the major providers of medical malpractice insurance, offers A.I.D. members a 10 percent discount off their insurance upon renewal. Thus, if your malpractice insurance costs $30,000 a year (average for a cardiologist), you save $3,000. A physician membership to A.I.D. is $1,000. You do the math.
2. An A.I.D. membership puts you in good company. Besides saving you money, membership also puts you in a group of like-minded colleagues. Numerous studies show that independent physicians are happier than employed physicians because they have more freedom to practice medicine without the pressure of meeting quotas set by hospital employers, and can therefore maintain a purer doctor-patient relationship. By refusing to “sell out,” independent physicians enjoy a level of integrity, independence and respect that those acquired by institutions don’t have. You get to be part of that group.
3. An A.I.D. membership gives you a voice. Independent doctors are by nature autonomous. Thus, they don’t have the lobbying clout large health systems have. But with our association they do. Though we only formed last year, we have been asked to represent the interests of independent doctors nationally on Capitol Hill. And we are giving voice to our members by participating in one of the nation’s leading anti-trust cases involving a health system’s acquisition of a large medical practice. The case, which is being decided right now, will have a far-reaching impact on the future of independent doctors.
Finally, while we speak out on behalf of our members, none of them risks the potential retaliation from their area hospitals. We guard the privacy of those members who want their membership confidential. There’s no directory. We don’t share our members’ names with anyone.
Oh, and did I mention it’s tax deductible? www.aid-us.org.
Marni Jameson, AID executive director/ 407-865-4110 or firstname.lastname@example.org.
7 Reasons Hospital-Physician Mergers Hurt Health Care
Every day more physicians are giving up their independent practices to become hospital employees.
And who can blame them? It’s tempting.
Hospitals can offer doctors more money, since hospitals get paid more for the same procedures. Plus, hospitals will take over the administration of the practice, and will cover staffing, billing, overhead and marketing. They will drive patient referrals into the practice, cover the costs of electronic medical records, and pick up the tab for the malpractice insurance. Why wouldn’t a doctor do this?
Well, because hospital-physician consolidations have many repercussions that doctors may not realize. Studies show that such mergers can negatively impact patients, doctors, communities and the nation’s health care.
Here, according to Tommy Thomas, a Winter Park CPA, and founder of the Association of Independent Doctors, are seven of those consequences, which physicians should consider before they trade independence for employment:
1. Competition decreases: When hospitals buy physician practices, competition dries up. It’s simple economics: Fewer independent providers competing with each other means costs go up and quality goes down.
According to America’s Health Insurance Plans, “An acquisition that eliminates significant competition between providers increases the ability of providers to lower their quality of care, abandon innovation, and demand and obtain higher prices for medical care.”
2. Quality goes down: Hospitals track how many patients their doctors admit and how many tests they order. Employed physicians’ employment contracts can depend on their numbers. This pressure results in employed physicians ordering more unnecessary tests and procedures, which not only drives up health-care costs, but also can put patients in harm’s way.
“Consolidation of providers results in a well-documented record of harm to consumers with price increases of 20 percent to 40 percent after consolidation,” according to AHIP.
3. Patients have less choice: Employed physicians are expected to refer to other doctors employed by that hospital, and to order tests through hospital-owned facilities, regardless of whether those doctors or facilities are the best, or most cost effective. Patients unwittingly get into the funnel going only to hospital-owned entities, which costs them more.
4. Costs increase. In a large study, the Medicare Payment Advisory Commission confirmed that hospitals charge more than independent doctors for the same procedure. Sometimes several times more. For instance, a heart catheterization in a freestanding center costs around $1,100, while the same procedure costs $4,000 in a hospital outpatient setting. “The disparities create incentives for hospitals to buy physician practices, which drives costs up for everyone: Medicare, private insurance companies, employers, employees and patients,” the 2013 MedPAC report concluded.
A study published in the Journal of the American Medical Association (Oct. 22) further substantiated the higher costs. The California study, which included 4.5 million patients seen between 2009 and 2012, found a significant difference in the mean inpatient costs when comparing patients of independent doctors, of doctors employed by a hospital, and of doctors employed by a multi-hospital system:
It adds up.
“If hospital facilities charged the same as independent doctors for the same services for 66 groups of services, taxpayers would save $900 million a year in Medicare costs,” said MedPAC. Imagine if insurance providers also brought their contracted rates with hospitals in line with their reimbursement rates for private practitioners.
5. Communities lose jobs. Independent practices are small businesses. Small businesses create about 65 percent of our nation’s new jobs, and are vital to the market dynamics of healthy communities. When independent doctors sell to hospital systems and become employees, the hospital takes over staffing and that often means loyal office workers lose their jobs.
6. Taxes go up: When a nonprofit health system acquires an independent physician’s practice, that practice overnight goes from supporting the community through paying property, tangible and sales taxes to paying no taxes. We all pay for that.
7. Job satisfaction and security go down: Employed doctors often find the best year of employment is the first one. After that, contracts often get worse, if they get renewed at all. Remember, employed physicians' jobs, salaries and benefits – can depend on their numbers. Because most physicians usually have to sign a non-compete agreement as a condition of employment, if they leave, or their contracts aren’t renewed, some aren’t allowed to practice in the area again for a specified period of time.
Most physicians don’t want to be part of the fallout that occurs when hospitals acquire them, but many also feel they don’t have a choice.
We think they do.
The Association of Independent Doctors is a fast-growing, national nonprofit organization designed to help independent doctors stay that way. Since it was established in April 2013, the association has grown to include members in eight states.
“We fight a fight that doctors have neither the time, means, nor clout to pursue,” said Thomas.
By organizing physicians in the fight to stay independent, A.I.D. communicates to patients, insurance providers, and government representatives the important reasons why our health-care system needs physicians to remain independent. For more information, go to www.aid-us.org .
Marni Jameson, AID executive director/407-865-4110 or email@example.com.
This post and the ones that follow comprise an ongoing series AID executive director Marni Jameson has written for Florida MD, a monthly publication for doctors. The series is now also appearing in The Triangle Physician in North Carolina. The collection gives a good overview of who we are, why we were formed, why doctors need to join, and what we're doing to support independent doctors.
AID Gives Voice to Independent Doctors
“Certainly, the only happy doctors I still know are all in private practice,” said the email from a physician who works for a large hospital system.
The email came in response to my news that I had left my job as senior health reporter of the Orlando Sentinel to run a national nonprofit trade association whose sole purpose is to represent the interests of independent doctors.
As a reporter, when a hospital system acquired a medical group, I interviewed sources on all sides: doctors, hospital executives, insurers, academics, patient advocates, consumers and government officials. Thus, I got a full-circle look at why more doctors were going to work for hospitals, and the impact that had on patient care and health-care costs.
I also saw that while the independent nature of private practitioners was mostly to their advantage, in one important respect independence was contributing to their undoing. Independent doctors are by definition not well organized. By not being allied, they didn’t have a collective bargaining voice.
Thus, their numbers were shrinking.
Unless you have been living in a yurt off the grid, you know that the rate at which hospitals have been buying doctors’ practices has been brisk in the past several years. Such roll-ups help hospitals capture market share, channel referrals to their other employed physicians and hospital-owned diagnostic and treatment centers, and receive more money for same procedures.
In 2000, well over half (57 percent) of all physicians in the United States worked for themselves; as of last year, that number was closer to one in three (36 percent), according to a report out from Accenture.
The rest went to work for hospitals.
And who can blame them? The lure to become a hospital employee -- the promise of more money, perceived job security, no more overhead, guaranteed referrals -- is strong. But, as many physicians, including the author of the email to me, learned, the move comes at a price.
The Association of Independent Doctors was formed in April 2013, when two certified public accountants in Winter Park, Fla., saw the impact that the acquisition of independent practices by hospitals was having on not only doctors, but also patients, local communities and the nation. They wanted to create a trade association to stop the trend.
I covered the inaugural meeting for the paper. About 120 doctors attended and nearly everyone joined that night. (Individual physician memberships cost $1,000 a year).
Since then, AID has grown to include members in eight states. More doctors and health-care advocates join every day. Most join because AID stands for what they care about, but don’t have the time, resources or clout to fight for:
“Physicians have a tendency to not get involved in critical changes affecting them, and specifically avoid the political end of medicine,” said Orlando orthopedic surgeon John McCutchen, who serves on the executive committee for AID.
“We no longer have the luxury of doing nothing,” he said. “If physicians don’t want non-physicians telling them how to practice, they need to get engaged.”
Of course, the Florida Medical Association and the American Medical Association represent physicians, too. However, because most of their physician members are employed or in academia, they are not in a position to champion the unique interests of the independent physician.
“The future of health care is changing, and we as independent physicians need to come together to steer the boat in the right direction,” said Dr. Pamela Snook, a Winter Park ob-gyn and AID member. “I joined because this is an avenue where I feel I have a voice that I don’t have otherwise. It’s a way to be heard.”
Snook, like other physicians who have resisted hospital employment, wants to remain independent so her allegiance remains unequivocally to her patients.
As the only national organization of its kind, AID has already established itself as a formidable, articulate force. Its founders have spoken on Capitol Hill, and the association has also been asked to support the Federal Trade Commission in an important anti-trust case involving a hospital’s purchase of medical group in Idaho.
In August, the association, on behalf of its members, filed a substantive friend-of-the-court opinion paper supporting a U.S. District’s court decision that the acquisition of a large medical group by St. Luke’s Health System violated antitrust law, and must be unwound.
St. Luke’s appealed, and the case is now before the U.S. Court of Appeals for the Ninth Circuit. The nation is watching as the court’s verdict will set an important precedent.
AID’s involvement put the voice of independent doctors on the national stage, making them part of a debate whose outcome will impact every American. Thanks to the growing support of doctors, we can collectively do what individuals alone cannot.
Marni Jameson, AID executive director/407-865-4110 or firstname.lastname@example.org.
Marni Jameson discusses the state of the independent practice of medicine on Americas Web Radio's "Medicine on Call" segment. Click the 'Play' button below to listen to the interview in full.
One of the consequences of the Affordable Care Act (ACA) is that it has sparked a giant wave of hospital consolidation: 100 deals were completed in the sector in 2014 — up 14% from the previous year, according to Wall Street research firm Irving Levin Associates.
Read more here: http://knowledge.wharton.upenn.edu/article/hospital-consolidation-can-it-work-this-time/
The National Physicians Council on Healthcare Policy convened on Capitol Hill recently and the mood was grim. The group of 50 independent physicians and lawmakers met in the Rules Committee Chamber of the Capitol building to discuss legislation that would impact them. While the news regarding regulatory changes coming at them was less than encouraging, there was one bright spot.
When my turn came to address the group, I began by saying, “I hope after I’m done speaking, you will all see a little ray of hope.”
Read more here: http://eeditionmobile.orlandosentinel.com/Olive/Tablet/OrlandoSentinel/SharedArticle.aspx?href=OSN%2F2015%2F04%2F10&id=Ar01706
Marni Jameson discusses the increasing scarcity of independent doctors with radio host Bud Hedinger on Bud Hedinger Live. Mari Jameson is the executive director of the Association of Independent Doctors.
Listen to the radio interview here: https://clyp.it/5znsrygh
Originally posted on the National Association of Independent Medical Practices website.
All across the country, hospitals are buying up independent medical practices at a brisk pace. While the temptation for independent practitioners to become employed is understandable, the trend toward consolidation is driving up health-care costs, and lowering quality of care and access. This talk will explore the dynamics driving this trend, the consequences to practitioners as well as patients, and alternatives.
Marni Jameson is the executive director of the Association of Independent Doctors, a national nonprofit designed to support the interests of independent physicians. Prior to assuming that role, Ms. Jameson was a senior health reporter for Tribune Media, writing for the Los Angeles Times and the Orlando Sentinel. She is also past president and founder of a medical marketing firm, author of two books, a nationally syndicated columnist, and frequent TV guest and speaker.
In a rare display of bipartisanship, House leaders are actively pursuing a deal to permanently change the way Medicare pays doctors and to extend a children’s health program for two years.
The estimated $200 billion package could be introduced as soon as this week by House committees responsible for health care policy. Both Speaker John Boehner (R-Ohio) and Democratic Leader Nancy Pelosi (D-Calif.) are personally involved to the point that Pelosi reached out to Senate Minority Leader Harry Reid (D-Nev.), and Boehner has spoken to Senate Majority Leader Mitch McConnell in recent days.
The replacement policy is widely supported by medical organizations. But some critics argue the bill is too vague and that its reporting requirements could be ruinous to small practices.
“Aspirationally, it is correct, but we don’t know enough about how to measure value,” said Robert Berenson, the former vice chairman of the Medicare Payment Advisory Commission. “This could mean the end of small general practices for all practical purposes.”
Read more: http://www.politico.com/story/2015/03/medicare-doctors-john-boehner-nancy-pelosi-116097.html#ixzz3Uf8uShGf
Address: 400 N. New York Ave., Suite 213 | Winter Park, FL 32789
The Association of Independent Doctors (AID) is a 501(c)(6) non-profit organization.